CSF1 helps a college figure out how much revenue/money it is losing from its actual attrition. CSFactor 1 is stated as:

CSF1 = [(P X A= SL) X T]

In the formula, P represents the total school population; not just the starting fall freshman number. Most schools use the fall incoming freshmen number and that is an error. The assumption is that attrition occurs most in the first six weeks of the freshman year. That may have some validity for the freshman year but the reality is that students are leaving colleges and universities in any one of the average six-plus years of a four-year degree and in the four-plus average years of a two-year degree. Students leave a school throughout their experience at the college. In fact, some schools are beginning to realize this and worry about the sophomore bubble.1But they really need to worry about the super soph sluff, the rising junior jilt, the junior jump, super junior split, the fourth year flee and so on. Every year, every semester, in fact every day is a chance for a student to drop out. Colleges need to be concerned with every student every day of their attendance, for it could be his or her last. So we look at the total population.

Annualized tuition is the number a school should use to figure its real attrition. Not the retention between the first and second semester or the freshman and sophomore years which are very popular ones. That leaves out all the students who already dropped out before the end of the second term or semester. That number fudges failure. For instance, if a college began a year with 100 new freshman and 99 left in week one but the remaining student stayed the whole year and returned for a sophomore year, the freshman to sophomore percentage would be 100%.

In CSF1, Aequals attrition. Again not just from freshman but an annualized attrition rate. And this rate is to include ALL students who leave for any reason. It does not matter if the student says he or she will be back. They are not in the population bringing in revenue until they actually do return. If they pay a place holding fee, that does not count them as a student until they are actually back in classes.

Fudge with the numbers if you have a need for delusion or are insecure, unethical or want to keep the Board feeling better, but when you use the formulas, be fully honest. It will help you understand why the budget is not working or may suddenly implode. No one likes surprises, especially ones that have parentheses around them in the budget and lead to freezes, cuts and the like. Using the formulas honestly can help forecast a reality to avoid surprises and initiate work on retaining students to maintain fiscal and operating health.

SL stands for students lost annually from total population and revenue production. And Tequals annual tuition at the school.

So here is what showed up when we analyzed CSF1 for MammonUniversity. You may know it. Its motto is Omnes Por Pecunia.Anything for a Buck.

Its total population was 500 students

Annualized attrition was at 39.6%

So SL (students lost annually) was 198.

Times an annual tuition of $13,000.

So, the formula becomes:

[(500 x 39.6% = 198) x $13,000] = a revenue loss of ($2,574,000)

To carry this forward, we can plug in other numbers and see how an increase in retention could add to the bottom line and thus the ability to pay for full time faculty, staff, their benefits, increases for adjuncts, instructional equipment, tutors, research release, new curricula and programs, maintenance, and so on. All those pesky costs that make a college or university better.

If attrition dropped by 5% for this school, and we substitute 5% increased retention for attrition percentage in the formula.

CSF1 = [(500 x 5% = 25) x 13,000] = $325,000 more revenue

Plug your school’s numbers in, and see how increasing retention affects your budget and instructional strength while attrition will sap the ability to meet budget and mission.

There are two additional Customer Service factors discussed in The Power of Retention along with much more on what motivates students to stay at or leave a college, university or career college.

But even without reading any more of the book, schools can change some of the headlines that are at the start of this piece is they just start to realize that

Attrition Costs Money.

Retention Makes Money.

And for those worrying about shrinking donations from alumni – here’s a thought. Students who drop out do not become alumni.

Please forward this article on to colleagues and especially the president, business officer and trustees at your school. We need to get people thinking about retaining students through graduation. It is in the best interest of the schools, their ability to meet mission, help build our economic and intellectual wealth.

And really most important, if we all believe that obtaining an education and degree is necessary for success, we owe the students who put their trust for a better future in our hands to do all we can to keep them in our classes and graduate. It just takes some real focus and academic customer service.

When students learn, we earn.

They do too. They stay and graduate!

And isn't that why they come to your school in the first place?

The Power of Retention, Dr. Raisman’s latest book on customer service and retention builds on that in important ways with timely solutions to improve retention.

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About Dr. Neal Raisman

Neal Raisman is the leading expert on increasing admissions, retention and enrollment through enrollment management based on academic customer service excellence.

Since 1999,he has helped over 450 colleges, universities and college-related businesses in the US, Canada and Europe increase their admissions, enrollment and retention through his on-campus service excellence audits, workshops,training and presentations.